Edging Forward: Memphis accelerator to focus on logistics startups

U.S. business spends some $1.2 trillion a year on logistics — moving and storing goods — representing an estimated 9.4 percent of our nation's GDP. That's huge part of the economy.

But while Memphis is a global leader in logistics, we still struggle with what it means for our community.

Yes, the typical Memphian knows about the dominance of FedEx Corp. and its central role in the global movement of goods.

But do we truly understand the volume, expertise, versatility, capabilities and, most importantly, the difficult problems the industry faces? Those problems not only affect the supply chain of consumer goods, but also finished and agricultural goods.

Problems spell opportunities — solutions that can be developed and infrastructure that can be built for new high-growth companies in Memphis.

So how do we go about identifying the problems, solving them, and creating companies around these solutions with the talent and capital to grow?

We at LaunchYourCity Inc., in conjunction with Memphis Bioworks under the Greater Memphis Accelerator Consortium, will be running one of the world's first logistics accelerators, a mentor-driven intense cohort that will last for several months with one main purpose: accelerating the startup process so that companies can receive investment for growth.

The accelerator will provide seed funding to get the companies started, intense technical assistance for building business models, testing and validating hypotheses around their solutions, prototyping their products, and so much more. This will begin in the fall of this year, and there is lots to be done in the meantime.

The State of Tennessee, through its Regional Entrepreneurial Accelerators program, is supporting the effort with operational dollars, but more resources must be cultivated in the form of sponsor dollars and private equity funding for the companies.

Conversations have begun with logistics professionals in the industry, but more have to take place. Awareness and engagement are priorities to get feedback for the true path forward. For example, logistics is such a huge industry we must look at how to define who we want to apply to the accelerator. The ultimate goal is to raise solid funding, ignite solid logistics talent, bring them together via solid mentorship, and launch them in the industry.

Why will this work? This accelerator model has shown success here: in 2012, we saw 12 companies being built via ZeroTo510 (medical device companies) and Seed Hatchery (information technology) accelerators. Six of them relocated to Memphis to start their business, and our accelerator companies received $3.8 million in funding last year.

We believe if the right resources and support in the logistics industry step forward, the opportunity is even greater.

First and foremost, we are seeking to learn and explore. Although we have experience in running accelerators, we want to do our due diligence in the logistics industry. Mentorship is the key, and we want to recruit and secure mentors to help these companies, either individually or through logistics companies themselves.

Fundraising is crucial, from the sponsoring of events leading up to the accelerator and the execution of the accelerator to getting national venture capital firms to look in on investing in Memphis in this capacity. Finally, we need to tell this global story so we get the best and brightest from all over the world applying to get one of the spots in this accelerator. We believe this can be an igniter for the Memphis community — businesses starting up and clustering around the existing industry verticals that are our bread and butter.